Mid-year earnings rose sharply, with operating profit growth outpacing revenue growth

For the six months from January to June 2026, revenue was ¥9,020 million, up 39.1% year on year; operating profit was ¥997 million, up 79.9%; ordinary profit was ¥910 million, up 84.1%; and interim net profit attributable to owners of the parent was ¥611 million, up 83.7%. Compared with revenue of ¥6,485 million and operating profit of ¥554 million in the same period a year earlier, the central feature of these results was that operating profit grew faster than revenue.

The operating margin was approximately 11.1%, calculated as ¥997 million divided by ¥9,020 million, compared with approximately 8.5% a year earlier, calculated as ¥554 million divided by ¥6,485 million. This represents an improvement of approximately 2.5 percentage points. In addition to higher revenue, factors such as higher brokerage fees in the distribution business, an increase in handovers in the development and subdivision business, and integrated manufacturing and sales cost reductions may have lifted margins. The next results should therefore distinguish whether revenue growth or margin improvement was the main driver.

By segment, the distribution business generated revenue of ¥2,208 million and operating profit of ¥715 million, while the development and subdivision business generated revenue of ¥5,504 million and operating profit of ¥332 million. The two businesses generated combined operating profit of ¥1,047 million, exceeding consolidated operating profit of ¥997 million, making it important to examine the details of consolidation adjustments, including intersegment transactions and company-wide expenses. The renovation business also generated revenue of ¥1,214 million and operating profit of ¥205 million, demonstrating the substantial contribution from the three core businesses.

There were no extraordinary gains or losses in the period, and no impairment loss was reported. Based on the disclosures, therefore, the increase in profit did not depend on a one-off extraordinary gain or a reversal of impairment losses. Cash flow from operating activities was also positive at ¥417 million, indicating that profit and operating cash generation moved in the same direction. The next results should present cumulative third-quarter operating profit, operating margin and cash flow from operating activities together to assess whether profit growth translated into actual cash generation.

The current disclosure focuses on cumulative figures for January through June and does not provide standalone profit and loss figures for April through June or detailed factors behind changes in selling, general and administrative expenses. The next results will therefore need to show standalone performance for July through September, cumulative operating profit, segment margins, and the factors behind changes in SG&A expenses of ¥562 million to assess the repeatability of the profit increase.